Public and
Commercial Broadcasting

The entire broadcasting value chain, from production and editing, through play-out and storage, to transmission and reception, is moving from analogue to digital. This transformation is creating a rich mix of opportunities and challenges for broadcasters.

Digitisation allows broadcast media to be more easily created, manipulated and distributed. New types of service enhancements - interactive programming and advertising, electronic programme guides, and high definition and 3D TV – are being made possible and these changes are driving innovation in pay-TV and FTA markets.

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PUBLICATIONS

  • Goodbye iPad

    The dispute over trademark ownership of iPad in China. An interview with Tiger Shan, partner, Value Partners Beijing.
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  • TV, meno spot per tutti ma non per La7 vicina al sorpasso su Rete4

    Advertisement in Italy and La7 success: a comment by Davide Tesoro Tess, partner at Value Partners London.
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CONTACTS

Operation & Empowerment

Organisation and employee empowerment are the new imperatives, in a media world of disintermediation and fragmentation, where key players are moving from being broadcast B2B business to narrowcast (one-to-one) B2C businesses. How consumers watch, share, discuss and interact with traditional TV is evolving rapidly, in response to the rise of social media and the proliferation of internet ready TV sets. This creates a new range of content creation, consumption and distribution opportunities and threats. Increasingly, TV shows will be designed to enable event-based social interactions. They will be consumed en masse, by those in different places but communicating their shared experience in a virtual world, and they will be distributed over social networks like Facebook, by friends to friends. Value Partners is working with broadcast clients to define their role as trusted aggregators and curators of choice in the fragmented media world of the future. In addition, we are helping to shape the people, structure, systems and processes required to implement that social TV strategy. Recent engagements include: • Strategy review focusing on a broadcaster’s opportunity to set up an in-house production unit • Advice to broadcasters about how to handle their relationship with ISPs in the context of increasing use of the internet to deliver VOD services • Support of a core media strategy team in developing a framework to formulate the future vision for 2020 • User segmentation, allowing the client to prioritize segments and evaluate the effectiveness of services offered • Management team support in securing content budget to launch innovative services, through business case modelling of financial impact

Regulatory & Policy

As markets become more fragmented, so some of the regulations in place to both protect and drive competition can become redundant. Meanwhile, new regulation can be required to enable organisations to compete effectively going forward. Fundamental to all regulatory policy challenges is market definition and with the level and pace of media market change, this opens an opportunity. In addition, the lines are blurred between telecoms and media and the role of media regulators around the world is increasingly complex. Regulators are facing new challenges in delivering their original mission of balancing consumer welfare, competition safeguarding and optimal use of scarce resources. Value Partners has assisted leading telecoms and media regulators, government and industry associations across a range of regulatory issues including policy and regulatory advice on market liberalisation and competition development; expert witness and investigation of complaints and disputes relating to regulatory issues. In addition, we conduct and manage industry and public consultations for regulators or formulate the responses to consultations for operators/market stakeholders, with work including: • Market impact assessment (MIA) of the impact on the television, ISP and VOD market of launching an internet-connected television platform • Pay TV consultation focusing on the impact of premium content right access on the competitiveness of a Pay TV market • Formulation of key flows of funds in the radio sector, assessing the impact of the recession on the profitability of the industry • In-depth technical review of the features and specifications for over-the-top delivery of VOD via IP to the television • Support in reviewing the case for changing Terms of Trade • Assessment and forecasting of the commercial radio sector to support negotiations with Government, regulators and collecting societies

Digital Development

Integrating content across the full range of platforms is the new strategic imperative, as readers and viewers increasingly want content which they can consume when and where they want. The seamless approach to digital media means that content is delivered to people's desktops, home pc, mobile phones, music players and other personal devices in addition to newspapers and broadcast television. In addition, the migration of advertising revenues to digital media has spurred investment in new technologies to enable improved delivery and targetting. Value Partners has assisted leading media players in designing and developing their digital strategies and in implementing the organisation wide change required to enable these new strategies in practice. Projects include: • Digital strategy and diversification strategy for a television broadcaster • Formulation of online strategy for a multinational television broadcaster • Identification and prioritisation of new digital business opportunities for a media services companies • Development of mobile strategies for global media companies, including the acquisition and servicing of customers using mobile services • Formulation of an integrated analogue switch-off (ASO) strategy for a range of commercial broadcasters • Cost Benefit analysis of switching to DAB radio, and of giving away DAB+ radio sets to drive take up of digital radio

Revenue Growth

Fragmentation and disaggregation are reducing the traditional revenues of incumbent players in the media industry. Faced with this challenge, these players are being forced to build new revenue streams, by creating new products or entering new markets or even charging for previously advertising-funded content. Recent examples include The Independent, in the UK, launching a complementary daily newspaper, called ‘I’ and priced at 20p (compared to £1 for The Independent), which targets lapsed readers of quality newspapers; The Times charging for access to its website and Television broadcasters pursuing micropayment opportunities, charging a small amount for previews and other premium content. Value Partners is assisting leading media players to identify new revenue and market opportunities, exploiting key assets to drive business sustainability, including: • Development of a set of diversification options for television broadcasters • Revenue maximisation strategy for a DTT broadcasting Mux business, through demand and supply side analysis • Business case review of a major media and telecoms player assessing whether to launch a pay-TV proposition • Development of strategic guidelines targeting revenue growth for an international media company • Identification, sizing and prioritisation of growth opportunities for a media company, establishing the ‘go-to-market’ approach options

M&A and Integration strategy

As clients look to diversify revenue streams, so the trend towards M&A to achieve those objectives continues, despite the downturn. However, with falling valuation multiples, the ability to seize value enhancement opportunities will play an increasingly important role in closing a good deal in the first place. We anticipate that the winners will be those firms where, alongside the financial engineering talent, there is a sound adoption of the more traditional principles of corporate management (strategy, sector insight, skill base, organisation, governance, succession management), as well as a greater focus and active engagement on the strategy & operations of the portfolio companies. Value Partners works with Private Equity players to identify key targets and to then execute maximum value from that investment. For media companies, Value Partners applies the same target identification and integration expertise, combining it with deep Media sector expertise, with projects including: • Target scoping for a major television production company looking at expanding into new markets • Valuation of a television channel’s ad sales business • Due diligence of broadcasting muxes, evaluating the future supply and demand for videostreams • Business forecast to support a re-financing deal for a TV production and distribution company • Due diligence of a leading online affiliate network player • Commercial due diligence of a regional radio asset comprising of 4 FM and 2 AM stations

Rights Management

Rights are where the key value of the media industry reside. Ownership and control are vital, whilst widespread distribution becomes the opportunity. Key areas of concern for organisations reside around content leakage and piracy; balancing the desire for control with the business need for widespread distribution and also building the necessary measurement tools and analytics to extract maximum value from widespread content distribution. In addition, much of this activity must be pursued in co-operation with the Hollywood studios and content factories. Ultimately, content providers appreciate that rights management is as much about the opportunity to develop new business models as it is about preserving the business of old ones. Value Partners works with rights holders to identify what those new business opportunities could be and how rights holders can best exploit their content to profit from these new opportunities, whilst safeguarding against rogue distribution. Recent engagements cover: • Independent assessment on the potential impact of changes to the Listed Events structure for major sporting competitions • Analysis of the sales approach and process for football rights • Evaluation of the impact on pay-TV providers, FTA broadcasters and sports rights holders of the listing of sports events • Feasibility study for a consortium of rights holders of developing a micropayments billing system for an internet-connected television platform

Valerio Fallucca, Principal Davide Tesoro-Tess, Principal Rachel Healy Senior Manager